Correlation Between Pintec Technology and PayPal Holdings

Can any of the company-specific risk be diversified away by investing in both Pintec Technology and PayPal Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pintec Technology and PayPal Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pintec Technology Holdings and PayPal Holdings, you can compare the effects of market volatilities on Pintec Technology and PayPal Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pintec Technology with a short position of PayPal Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and PayPal Holdings.

Diversification Opportunities for Pintec Technology and PayPal Holdings

-0.59

Correlation Coefficient

Pintec Technology  PayPal Holdings

Excellent diversification

The 3 months correlation between Pintec and PayPal is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and PayPal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PayPal Holdings and Pintec Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pintec Technology Holdings are associated (or correlated) with PayPal Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PayPal Holdings has no effect on the direction of Pintec Technology i.e., Pintec Technology and PayPal Holdings go up and down completely randomly.

Pair Corralation between Pintec Technology and PayPal Holdings

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 4.06 times more return on investment than PayPal Holdings. However, Pintec Technology is 4.06 times more volatile than PayPal Holdings. It trades about 0.02 of its potential returns per unit of risk. PayPal Holdings is currently generating about 0.0 per unit of risk. If you would invest  223.00  in Pintec Technology Holdings on January 30, 2024 and sell it today you would lose (115.00) from holding Pintec Technology Holdings or give up 51.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pintec Technology Holdings  vs.  PayPal Holdings

Pintec Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pintec Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pintec Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

PayPal Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PayPal Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, PayPal Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pintec Technology and PayPal Holdings

The main advantage of trading using opposite Pintec Technology and PayPal Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, PayPal Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PayPal Holdings will offset losses from the drop in PayPal Holdings' long position.

The idea behind Pintec Technology Holdings and PayPal Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.